What to Watch in the Week Ahead and on Monday, Jan. 26

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Week Ahead
The markets will have a lot to chew on in the coming week, with a slew of earnings ranging from
Apple to Zimmer Holdings and another 140 companies in between. So far earnings have been modest
at best, though the recent round of quantitative easing from the European Central Bank has
exacerbated some existing trends in the market (lower Treasury yields, a stronger dollar) and
those should mostly stay in place. But, with the Federal Reserve decision due in the middle of
the week, the market is bound to see some volatility as people start to wonder if the Fed might
nod to the deflationary global forces and weak figures of late in manufacturing, or if they stay
the course or not.
Apple Inc reports first-quarter results on Tuesday. Apple is expected to report one of its
strongest quarters ever, helped by strong unit sales of its big-screened iPhone 6 and 6 Plus.
The new iPhones are helping Apple chip away at Samsung Electronics' dominant position in its
home turf of South Korea, according to a monthly report released by Hong Kong-based market
research company Counterpoint. November was the first full month that the larger-screen iPhones
were sold in the country. Some analysts speculate that Apple, which gets more than half its
revenue from outside the United States, will feel the weight of a surging dollar on its results.
On Thursday, Google results fourth-quarter results. Google is facing a variety of challenges as
it begins 2015: a wave of turnover in its executive ranks, growing regulatory entanglements in
Europe and ongoing erosion in its ad prices due to the shift from PCs to mobile devices. With
CEO Larry Page having recently announced his intention to focus less on day-to-day operations,
investors will be eager for the company to lay out its plan for keeping its advertising business
growing and fending off various regulatory and competitive threats.
Facebook releases fourth-quarter earnings on Wednesday. Facebook's stock soared in 2014 as the
company's mobile ad revenue exploded. But there are signs that revenue growth may slow in the
coming quarters, and the social media company has warned that spending will rise in 2015 as it
embarks on a hiring spree and invests in other businesses. Other businesses like Instagram and
WhatsApp will be in the spotlight when Facebook reports results, as investors look for signs
that Facebook has some new legs of growth.
Alibaba Group Holding Ltd reports third-quarter results on Thursday. The Chinese e-commerce
juggernaut is expected to report profit above estimates, according to Thomson Reuters StarMine.
The company, co-founded by billionaire Jack Ma, is planning a major move to win U.S. business
this year, by offering American retailers new ways to sell to China's vast and growing middle
class. Analysts will be scrutinizing how the company has spent its money to keep its edge on its
competitive home turf.
Next week's data-heavy calendar will likely paint an upbeat picture of the economy at the end of
2014 and confirm momentum in the near-term. The Commerce Department's durable goods orders
report on Tuesday is expected to show orders rose 0.5 percent in December after falling 0.9
percent in November. Core capital goods orders are expected to have risen 0.5 percent last month
after declining 0.5 percent in November. Commerce Department data also on Tuesday is expected to
show new home sales increased in December to 450,000 unit from 438,000 units in November. The
Conference Board is expected to report that its consumer confidence index rose to 95 in January
from 92.6 in December. The Commerce Department's advance fourth-quarter GDP report on Friday is
expected to show the economy expanded at a 3 percent annual pace after the third quarter's
robust 5 percent rate. Also on Friday, the Labor Department is expected to report that its
employment cost index, the broadest measure of labor costs, increased 0.6 percent in the fourth
quarter, building on the third quarter's 0.7 percent rise. Later on Friday, the University of
Michigan is expected to report that its consumer sentiment index held steady at 91.5 in January.
AT&T Inc reports fourth-quarter results on Tuesday. The telecom company's quarterly profit is
expected to miss analysts' estimate, according to Thomson Reuters StarMine. AT&T's plan to allow
its customers to bring their own devices gained popularity, but worried analysts that it may
lead to less customer loyalty. Increasing competition in a saturating U.S. wireless market drove
wireless carriers to dump two-year contract plan and replace them with equipment financing
plans.
Visa Inc releases first-quarter results on Thursday. MasterCard is expected to post
fourth-quarter profit on Friday. The world's two largest credit and debit card companies are
expected to post bigger quarterly profits as they benefits from a rise in consumer sales during
the holiday period and falling gas prices which also helped boost consumer spending. However,
their growth in the United States, its largest market, may be hampered by the strong U.S. dollar
though the volatility in foreign exchange rates is expected to boost their cross-border volumes.
Federal Open Market Committee begins a two-day meeting on interest rate policy on Tuesday
followed by decision on Wednesday. On Thursday, Federal Reserve Board Governor Daniel Tarullo
speaks on "Advancing Macroprudential Policy Objectives" before the Office of Financial Research
and Financial Stability Oversight Council 4th Annual Conference in Fairfax. The speech comes as
the Fed ramps up its internal efforts toward building up its own financial stability operation,
a controversial subject given the complexity of trying to deflate an asset bubble before it
pops. It also comes as the Fed has increasingly voiced concern that the FSOC will be unable to
move quickly or effectively to act ahead of the next crisis.
Ford Motor will report fourth-quarter earnings on Thursday. The automaker warned recently that a
charge related to its Venezuelan operations will reduce the profit by about $700 million. The
company's December sales were up just 1.2 percent, missing expectations.
Yahoo reports fourth-quarter results on Tuesday. CEO Marissa Mayer is set to outline the
company's plans for the 15 percent stake in Chinese ecommerce giant Alibaba. Investors are
pressuring Yahoo to sell the stake, worth nearly $37 billion, in a tax-efficient manner and to
return the money to shareholders. But Yahoo, which is struggling to turn around its core
business, may want to use some of the proceeds for acquisitions. The company's
highly-anticipated plans for the Alibaba stake could set the stage for a confrontation with
shareholders and put Mayer's future at the company at risk.
Procter & Gamble reports second-quarter results on Tuesday. The consumer goods giant will report
earnings before the stock market opens.
Pfizer reports fourth-quarter results on Tuesday. Wall Street expects the largest U.S. drugmaker
by sales, to report higher quarterly results, helped by sales of new cancer treatments and
growing sales of mainstay brands such as Lyrica for pain and its Prevnar vaccine against
pneumococcal infections. Bristol-Myers is also reporting fourth-quarter results on the same day.
The U.S. drugmaker is expected to report lower quarterly sales and earnings, amid declining
sales of its treatments for HIV and the loss of diabetes drugs that it sold off earlier in the
year to AstraZeneca Plc.
Boeing reports fourth-quarter earnings on Wednesday. Boeing recently reported that it delivered
a record 723 jetliners in 2014, comfortably hitting its target of 715-725. Investors will focus
on how much cash was generated, the outlook for 2015 and whether the cost of producing the 787
has stabilized. Boeing's defense business, meanwhile, is trying to trim $2 billion in costs.
On Tuesday, U.S. conglomerate United Technologies reports fourth-quarter results, the company's
first quarterly report since new CEO Greg Hayes was elevated from finance chief in November. The
manufacturer of jet engines, helicopters and elevators is expected to post a 2 percent climb in
revenue. Aside from results, investors will be eager to hear more about Hayes' plans as he has
shaken up management ranks and vowed to get more aggressive on deals.
DuPont is expected to report a higher fourth-quarter profit on Tuesday. The chemical company's
earnings are expected to benefit from a rise in operating margins in most of its businesses. The
focus this quarter will be on the company's response to activist investor Nelson Peltz's call to
break up the conglomerate. Peltz, who nominated himself and three other members from his Trian
Fund to DuPont's board earlier this month, has been stepping up pressure on the company to break
up. DuPont has insisted that it is more beneficial to keep all its businesses together, but with
a proxy fight for the board underway, the company could look to strike a compromise. DuPont has
already announced plans to spin off of its performance chemicals business and it expects to
record a related $315 million charge this quarter. Investors will be on the lookout for details
about the spin-off and the subsequent listing.
Qualcomm releases first-quarter results on Wednesday. The chipmaker's report comes as Wall
Street waits for it to resolve anti-trust investigation with regulators in China, its top growth
market. For years, Qualcomm executives touted the rollout of LTE cellphone technology in China
as a major growth opportunity but the company's outlook there has been clouded as investors
worry it will be forced to make major concessions on its cash-producing royalty business.
Amgen is expected to report higher fourth-quarter profit on Tuesday and provide its first
forecast for 2015. Investors will be looking for any new color on the ongoing restructuring at
the world's largest biotechnology company. Also in focus will be any new insight into the
potential impact of the approval of the first U.S. biosimilar of the company's drug Neupogen and
also how foreign exchange rates will influence 2015 earnings.
On Thursday, Amazon.com Inc will report fourth-quarter results. Amazon is expected to report
another quarter of skimpy margins as its investments in China, cloud computing, video content
and logistics trumps sales growth. The stronger U.S. dollar could also pinch earnings. RBC
Capital Markets predicts that Amazon's operating margins will eventually rise to almost 5
percent by 2016 from nonexistent in the third quarter. About one percentage point of that
increase will be due to the hike in Prime membership fees to $99 from $79 last spring.
Viacom Inc releases first-quarter results on Thursday. Viacom, which owns the Paramount movie
studio and cable network MTV and Comedy Central, is expected to report quarterly revenue above
estimates, according to Thomson Reuters StarMine, driven by the success of blockbuster movie
releases. Paramount Pictures is seeing the possibility of a new profitable franchise with the
success of its movie "Teenage Mutant Ninja Turtles". The Christopher Nolan- directed space saga
"Interstellar" is also expected to have boosted revenue.
Time Warner Cable Inc reports fourth-quarter results on Thursday. The No. 2 U.S. cable TV
operator is expected to post revenue marginally below expectations, according to Thomson Reuters
StarMine. The company has been losing more video subscribers, who prefer internet streaming
services offered by companies such as Netflix. Analysts are looking for video subscription
numbers for the quarter and any news from its pending acquisition by Comcast Corp.
Dow Chemical reports fourth-quarter results on Thursday. The chemical company is expected to
report a higher quarterly profit as its plastics business continues to benefit from low raw
material costs. The focus this quarter will be on the company's plans to raise $7.5-$8.0 billion
from the sale of its low-margin assets by mid-2016. The company averted a proxy fight with Dan
Loeb's hedge fund, Third Point LLC, last November by agreeing to add four independent directors
to its board. Loeb had been pushing Dow to spin off its lucrative but slow-growing petrochemical
business and focus on specialty materials. However, Dow has maintained that keeping its units
together helps lower costs. Analysts will want to know how low oil prices will affect the
company's integrated structure. U.S. chemical companies, unlike European ones, use natural gas
as a feedstock, rather than oil. Falling oil prices, however, may now erode that advantage over
European competitors.
Eli Lilly & Co reports fourth-quarter results on Friday. The company's sales and earnings have
been battered over the past three years due to patent expirations on its biggest medicines.
However, it is expected to have started turning the corner in the quarter, with relatively flat
earnings. As its painful patent cliff begins to fade away, investors will want details on
progress of experimental drugs, including treatments for diabetes and cancer, needed to drive
growth in coming years.
Abbvie Inc reports fourth-quarter results on Friday. The global research based pharmaceuticals
company, which in October backed away from its planned $55 billion purchase of Irish drugmaker
Shire, is expected to report higher quarterly earnings as strong sales of arthritis treatment
Humira help offset declining sales of heart medicines. The big focus on earnings day will be
Viekira Pak, the company's newly approved treatment for hepatitis C, and what marketing strategy
is needed to maximize its sales in the face of competition with products from market leader
Gilead.
Biogen Idec reports fourth-quarter results on Wednesday. Biogen will release earnings as well as
put out information on the launch of its new hemophilia drugs and data showing whether sales of
its high profile multiple sclerosis drug Tecfidera are still growing fast or beginning to level
off. The company will also likely provide first forecasts for 2015 with potential insight into
the expected impact of foreign exchange rates on 2015 results.
Abbott Laboratories posts fourth-quarter results on Thursday. The pharmaceuticals and healthcare
products maker is expected to report higher quarterly earnings, helped by the re-introduction in
China and Vietnam of pediatric milk formula brands that had been recalled in 2013 due to
contamination fears. Investors will want details on how Abbott can further bolster its
nutritional products, including its Similac infant formula and Ensure beverages for adults, and
whether it may make acquisitions of medical devices to improve its other major business.
Diversified manufacturer 3M reports fourth-quarter results on Tuesday, with revenue expected to
rise by about 3 percent. Investors will be looking at the extent of the fallout from the strong
dollar, given that 3M derives more than 60 percent of its sales from outside the United States.
Xerox Corp also reports fourth-quarter results on Friday. The maker of printers and copiers is
expected to report revenue below estimates, according to Thomson Reuters StarMine. The company
had recently agreed to sell its information technology outsourcing arm to French IT services
firm Atos to focus on faster growing units such as business process outsourcing and document
outsourcing.
Corning Inc is expected to post fourth-quarter results on Tuesday. The specialty glass maker is
expected to post revenue marginally above expectations, according to Thomson Reuters StarMine,
due to increased demand for its Gorilla Glass. As there were no major mobile launches, the
company had expected its core sales in its specialty materials business to decline in the
quarter. Analysts are looking for the company to provide outlook for its cover glass business.
UBS analyst Amitabh Passi sees incremental upside if the company undertakes strategic
alternatives such as the divestment/consolidation of Dow Corning.
General Dynamics also reports fourth-quarter results on Wednesday. The defense supplier is
counting on its aerospace business to boost profit as defense spending remains tight. The
company, which makes Gulfstream business jets along with ships and tanks, said in October it
expected "very strong" orders in the quarter after the introduction of two new aircraft.
Investors will be looking for an update on expectations for sales to the U.S. military this
year, as well as demand from international markets, which make up nearly a fifth of total
revenue.
Hershey Co reports fourth-quarter results on Thursday. The chocolate maker cut its full-year
earnings and revenue growth forecasts in October, citing higher dairy prices, a stronger dollar
and weak sales growth in some markets. North American cocoa grindings, an indicator of demand
for chocolate's key ingredient, fell 1.95 percent in the quarter, its first drop in two years,
indicating that higher chocolate prices could be hurting demand. Hershey hiked chocolate prices
in July for the first time in three years, in response to soaring cocoa and dairy prices.
Valero and Phillips 66 report fourth-quarter results on Thursday. The two U.S. refiners are
likely to post better-than-expected quarterly profits, according to Thomson Reuters StarMine,
helped by higher refining margins and gasoline demand. Investors will be looking for any
commentary on the impact of the fall in crude oil prices and narrowing of WTI-Brent differential
on the refiners' exports and margins.
Broadcom posts fourth-quarter results on Thursday, as the mobile chipmaker refocuses on chips
for networking and Wi-Fi after shuttering its money-losing cellphone baseband chip business last
year. Investors expect mostly flat revenue for the quarter but a handsome increase in
profitability thanks to less R&D spending on advanced baseband technology.
Lockheed Martin will report fourth-quarter results on Tuesday. Pentagon's No. 1 supplier is
expected to post higher earnings and revenue despite pressures on U.S. defense spending, as
sales to commercial customers in United States as well as international governments picked up.
Lockheed gets 17 percent of its revenue from international markets and 1 percent from U.S.
commercial customers.
Raytheon reports fourth-quarter results on Thursday. The U.S. weapons maker is expected to
report higher fourth-quarter sales and profit despite increased pressure on U.S. defense
spending.
Northrop Grumman reports fourth-quarter results on Thursday. The aerospace and defense
technology company is expected to report higher quarterly earnings, despite a drop in revenue,
reflecting large scale share buybacks and cuts in overhead costs.
Rogers Communications reports fourth-quarter earnings on Thursday. Canada's largest mobile
network operator has fallen behind its biggest rivals in increasing subscribers recently, and
has used promotional pricing to hold onto cable customers. The Toronto-based company has spent
heavily to launch its coverage of National Hockey League games and recently launched in
on-demand video service in partnership with western Canada's Shaw Communications.
Electronic Arts Inc reports third-quarter results on Tuesday. The video game publisher is
expected to report profit above estimates, according to Thomson Reuters StarMine, as the company
focuses more on its big selling titles such as "FIFA". The company might see a revenue fall
after the smash success of "Battlefield 4" a year earlier. The video games developer has been
making a push to freemium model, where games are free to download and revenue is generated
through in-game purchases. Analysts believe that EA's mobile growth can soon outpace the already
rapidly growing mobile market.
On Tuesday, Western Digital reports its second-quarter results. The hard-disk drive maker is
expected to report profit and revenue above analysts' estimates, according to Thomson Reuters
StarMine, benefiting from businesses upgrading computers and higher demand for storage used in
servers and data centers. An improving PC market is also expected to help the company. Investors
will look out for updates on the company's full-year outlook.
Textron reports fourth-quarter results on Wednesday. The company has benefited from strong
demand for its Cessna and Beechcraft jets as businesses increase spending in a recovering U.S.
economy. Textron raised its forecast for full-year earnings in October, citing more demand for
aircrafts than available to sell. The company, which also makes Bell helicopters and EZ-Go golf
carts, has said it expects most of the demand to be for its new models, scheduled to be launched
in 2015 and 2016. Investors will be looking for its initial forecast for this year.
Canadian National Railway reports fourth-quarter results on Tuesday. The Canadian company may be
asked about the impact of lower oil prices on its crude by rail business, and about how its
operations are running after last year's serious congestion problems. The company is expected to
report a rise in earnings and revenue.
Rockwell Automation reports first-quarter results on Wednesday. The company, which makes
automation systems that help factories run smoothly, is expected to report higher profit helped
by an improving U.S. consumer products (food and beverage, home and personal care) and
transportation industries. Both the consumer products and transportation industries, which
contribute about 30 and 15 percent to company's annual revenue respectively, are expected to do
well in 2015 as the jobs situation brightens and consumer spending accelerates. Investors will
look out for an update on 2015 outlook for the company's oil and gas unit, which is about 12
percent of annual revenues, and comments on how a strong dollar will impact international
operations, which contribute about 49 percent of sales.
American Airlines reports fourth-quarter results on Tuesday. While analysts were mildly
disappointed with the company's lower-than-expected guidance for unit revenue in the fourth
quarter, they expect bullish guidance for 2015, thanks to the plummeting price of oil. The
largest U.S. airline by passenger traffic has participated in the full price drop because it
does not hedge its fuel consumption.
Coach Inc will report second-quarter results before the bell on Tuesday. The accessories
retailer, known for its poppy handbags, has struggled to keep up with competitors, particularly
Kate Spade & Co and Michael Kors Holdings Ltd, in the its affordable luxury segment. The company
said this month it would buy women's luxury shoe company Stuart Weitzman Holdings for about $574
million in an attempt to better compete with its fast-growing rivals.
CGI Group reports first quarter results on Wednesday. The Montreal-based company is expected to
eke out profit growth on flat revenue as it further improves margins at its Logica business.
Bookings in the U.S. are still expected to lag, several quarters after losing the contract to
manage the U.S. healthcare plan, Obamacare. Investors will be eager to hear whether the company
has found any acquisition targets, which it said late last year was one of the paths for further
growth.
VMware Inc releases fourth-quarter results on Tuesday. The virtualization software maker is
likely to report profit above estimates, according to Thomson Reuters StarMine. The company is
expected to benefit from new license sales and contract renewals. Activist investor Elliot
Management, which has been pushing parent EMC Corp to spin off VMware since October, reached a
standstill agreement with EMC this month, easing pressure on EMC until September. Investors will
look forward to commentary from VMware on spin-off prospects and growth outlook. Separately, EMC
Corp reports fourth-quarter earnings on Wednesday before markets open.
Asset manager Invesco Ltd is scheduled to report fourth-quarter results on Thursday. Analysts
expect the money manager to earn 62 cents a share, up from 58 cents a share a year ago. Atlanta,
Georgia-based Invesco oversees PowerShares, the fourth-largest provider of exchange-traded
funds.
JetBlue Airways reports fourth-quarter results on Thursday. Change is on the horizon for the
company, which will have a new CEO in February. The company is already transforming products,
following a December announcement that the carrier will charge fees for low-fare customers'
first checked bags for the first time, in line with industry practices. The New York-based
passenger airlines will provide guidance for the coming year, giving investors a first look at
how the airline is handling the start of these transitions.
Potash Corp of Saskatchewan reports fourth-quarter results and gives guidance for 2015 earnings
on Thursday. Analysts expect the world's biggest fertilizer company to report a more profitable
quarter and year ahead. Of interest are further developments in new CEO Jochen Tilk's review of
phosphate operations and the Canadian based company's equity stakes in fertilizer companies
Sinofert, SQM, Israel Chemical and Arab Potash Company.
CONSOL Energy Inc reports fourth-quarter results on Friday. Weakening coal and oil prices are
likely to have led to a lower quarterly profit. CONSOL, which also faces increasing regulatory
pressures in the North American coal market, switched its focus to oil and gas exploration and
production last year in an attempt to protect itself from lower coal prices. Capital expenditure
guidance for the year is likely to be the key focus as oil and gas companies continue to lower
budgets. Investors will also keep an eye out for an updated timeline for the proposed initial
public offering of CONSOL's thermal coal business.
On Friday, Franklin Resources announces first-quarter results. Investors will focus on flow data
and how net withdrawals from the fund run by star manager Michael Hasenstab last year may hit
the bottom line of the company, known for its heavy exposure to developing markets including
Ukraine and Africa.
Juniper Networks Inc reports fourth-quarter results on Tuesday. The network gear maker is
expected to post revenue marginally above expectations, according to Thomson Reuters StarMine,
due to on increased Web 2.0 customers and cable offerings. However, analysts expect to see
weakness in routing, switching and security in the quarter and the first half of 2015 due to
lower spending by service providers in U.S.
Lexmark International Inc reports fourth-quarter results on Tuesday. The printer maker is
expected to report profit slightly below estimates, according to Thomson Reuters StarMine.
Analysts anticipate currency pressure to have affected operating profit by about 20-25 percent
and expect to see cost reductions to offset that.
Peabody Energy Corp reports fourth-quarter results on Tuesday. The coal miner is expected to
report a bigger quarterly loss hurt by tepid demand in an over supplied U.S. coal market. Coal
producers have long been struggling with weak demand and a rail jam in the U.S. prohibiting
their efforts to ride on a recovery in thermal coal demand. Investors will look for comments on
the company's cost cutting efforts as they expect Peabody to save from falling oil prices and a
weaker Australian dollar. The company gets about 40 percent of its revenue from Australia.
Investors will also look for more color around Peabody Energy and Glencore's joint venture at
two neighboring mines in Australia's Hunter Valley in November in an effort to slash costs.
Harman International Industries Inc reports second quarter results on Thursday. The audio
product maker is expected to report profit above estimates, according to Thomson Reuters
StarMine, as strong U.S. auto sales in December are expected to have driven demand for car audio
products. Harman, home to brands such as JBL, Mark Levinson and Harman Kardon, had earlier
reaffirmed its full-year forecast, as automakers' U.S. sales rose due to falling gas prices. The
company, which recently bought two privately-held software firms, is trying to make a push
towards creating the "connected car", where technology connects everything through the Internet.
On Thursday, Royal Caribbean Cruises, the world's second-largest cruise operator, reports
fourth-quarter results. They are expected to beat analysts estimates, according to Thomson
Reuters StarMine. The company forecast full-year profit below analysts' estimates in October due
to stiff competition in the Caribbean, its biggest market, and a stronger dollar. It is however
expected to show stronger growth in 2015 as pricing issues in the Caribbean are expected to ease
after April.
Shake Shack Inc, a burger chain that grew out of a hot dog stand in New York's Madison Square
Park, is expected to raise up to $80 million its initial public offering on Friday. The
company's offering of 5 million class A shares is expected to be priced between $14-$16 per
share, valuing the company at up to $568 million. The IPO follows a string of successful debuts
by casual dining chains last year, including Habit Restaurants Inc, El Pollo Loco Holdings Inc
and Zoe's Kitchen Inc. Shake Shack has developed a cult following since it was founded by
restaurateur Daniel Meyer in 2001.
Semiconductor maker Applied Micro Circuits' third-quarter report on Tuesday will likely include
an update on its progress selling new low-power server chips. The company is one of a handful
expected in the next year to use technology adapted from smartphones to challenge Intel's
dominance of the data center.
PerkinElmer reports fourth-quarter results on Thursday. The scientific instruments maker is
expected to report higher quarterly sales and profit and provide its first forecast for 2015,
including the projected impact of the strong dollar on overseas sales.
On Tuesday, Mexico releases economic activity data which will reveal how growth fared in
November. Trade balance data out the same day will show how factory exports behaved in December,
after posting their biggest decline in nearly two years the prior month. Analysts expect Mexican
central bankers to keep rates on hold at a record low of 3 percent on Thursday, Mexico's first
interest rate decision of the year and its first in the 1 pm Thursday time slot. On Friday, the
finance ministry will reveal the fiscal balance for December.
Monday, January 26
Microsoft reports second-quarter results after markets close. Microsoft posts earnings after the
traditionally lucrative holiday season, with investors expecting higher revenue, boosted by Xbox
and phone sales, but lower overall profit due to the shift of Office and other services to the
capital-intensive cloud, which tends to eat away at margins. Meanwhile, its core Windows
business continues to stagnate amid lackluster PC sales.
D.R. Horton reports first-quarter results before markets open. The largest U.S. homebuilder is
expected to post a lower quarterly profit, hurt by rising labor and construction costs and
increased incentives in certain markets. Homebuilders have had to offer higher incentives in
some markets as demand remained constrained by conservative lending standards by banks during
the period. D.R. Horton, like competitor Lennar Corp, is likely to forecast lower margins for
2015, as falling oil prices hurt the Texas economy, which is among its biggest markets.
Seagate Technology reports fourth-quarter results. The hard-disk drive maker's revenue is
expected to be in line with analysts' estimates, according to Thomson Reuters StarMine. However,
analysts see an upside in first-quarter as demand increased for its personal computers and cloud
storage products. Enterprise category, comprising Seagate's cloud business, is expected to be
positive in the first half of 2015.
Texas Instruments posts fourth-quarter results after markets close. Many investors believe a
short-term industry correction in demand for chips late last year has passed and will look for
confirmation from Texas Instruments, which makes chips for a broad range of markets.
Brazil's central bank releases Focus market survey results for prior week. The weekly economic
survey with more than 100 financial institutions includes forecasts for gross domestic product,
interest rates and inflation rates. Separately, Mexico will release retail sales data for
November, following two months of declines. (0900/1400)
(Compiled By Astha Rawat in Bengaluru; Editing by Savio D'Souza)